Profit taking sparked by a falling dollar sent Wall Street stocks lower Thursday, but the Dow index managed to regain more than half its losses by the end of the day.

The Dow Jones index of 30 industrials, up 56.95 points Tuesday but down 0.42 on Wednesday, dropped 13.65 to 2,796.08.

Declining issues outnumbered advances in nationwide trading of New York Stock Exchange-listed stocks, with 645 up, 924 down and 418 unchanged.

Big Board volume came to 177 million shares, against 192.33 million in the previous session.

The dollar closed at 1.6785 West German marks and 143.40 Japanese yen, down from Wednesday's close of 1.7225 and 145.20 respectively after central banks intervened to knock the currency lower.

The Tokyo Stock Exchange reopened after the New Year's holiday with stocks falling back in thin half-day trading. The Nikkei 225-share index, which closed last year at a record high, lost 202.99 points to 38,712.88.

The Financial Times 100-share index finished with a decline of 12.1 points at 2,451.6.

CREDIT Bond Prices Steady in Quiet Trading

Bond prices were unchanged to marginally higher in uneventful trading.

The Treasury's benchmark 30-year bond, which fell 3/8 point on Wednesday, was unchanged. Its yield held at Wednesday's level of 8.03%.

Analysts said the bond market showed slight gains in early trading after the government reported a sharp increase in unemployment claims for the week ended Dec. 23 to the highest level since early 1986.

But a selloff later in the day dragged bond prices to lower levels. Traders have been pessimistic in recent days because of indications of strength in the economy unlikely to pressure the Fed to lower interest rates.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8.25%, down from 8.313% late Wednesday.

Hog futures settled 1.5 cents higher across the board on the Chicago Mercantile Exchange, with the contract for delivery in February at 50.5 cents a pound; frozen pork bellies were 2 cents higher across the board, with February at 51.47 cents a pound.

Live cattle futures settled 0.20 cent lower to 0.40 cent higher, with February at 76.95 cents a pound; feeder cattle were unchanged to 0.35 cent higher, with January at 84.55 cents a pound.

The report surprised most analysts, whose observations of slaughter rates relative to the September report had led them to expect little change in the December tally.

One reason for the decline in herd size was the USDA's sharp downward revision in the September inventory. Some analysts found the revision especially disturbing because the USDA in September had revised sharply upward the June inventory number.

"It's really casting a little bit of doubt on the credibility of the hog numbers being released by the USDA," said analyst Dale Durchholz of AgriVisor Services Inc. in Bloomington, Ill. "It makes you wonder what the actual benchmark is."

"I think it was just a lot of liquidation," said energy analyst Andrew Lebow of E. D. & F. Man International Futures Inc. "The crude oil market had gone up about $2 in three days. That's a huge move and the market was a little tired."

West Texas Intermediate crude oil settled 0.27 to 0.57 cent lower on the New York Mercantile Exchange, with February at $23.41 a barrel; heating oil was 1.45 to 5.01 cents lower, with February at 73.19 cents a gallon; unleaded gasoline was 1.25 to 1.94 cents lower, with February at 65.29 cents a gallon.

Brazilian authorities announced a resumption of orange juice exports to the United States after a week's suspension, which contributed to the drop in orange juice futures prices.

Orange juice futures finished 1.05 to 3 cents lower on the New York Cotton Exchange, with January at $1.71 a pound.